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>> It should be more expensive to be big. It is, but they can afford it because when it comes to access to capital, they're at the front of the line. When the
by jondubois 8y ago
>> It should be more expensive to be big.
It is, but they can afford it because when it comes to access to capital, they're at the front of the line. When the Fed creates new money through government loans or engages in open market operations, corporations are the first entities to get a hold of that money. It's like they have pipelines that feed new Fed-generated cash straight into their bank accounts.
Just look at Oracle; their software is mostly legacy. They make all their money from huge government contracts. The government doesn't really care about how inefficient or expensive Oracle is because the money comes from taxpayers; if the government overspends, they can just get more money from the Fed.